I don't think the cliff is that bad for a middle class family. For a family of four the subsidy cutoff at 400% of the FPL is 94k. If you put in some numbers (say mid 40's, 2 kids) the most subsidy they would lose by going over is about 3.5k. That is not bad on 94k income. (The subsidy loss in this situation gets worse as the parents get older.) However given that working couples can also adjust their income by 401k, IRA contributions I think you are looking at well over 100k gross before being hit by the subsidy loss. With 100k+ income, is this middle class?
The people who will get hit the worst by the cliff are older couples (limit is only 62k for 2) without kids. At age 60 they would get hit by a loss of 10k (on 62k income). Again early-retirees who cannot contribute to 401k/ira may have greater difficulty adjusting their income.
I do agree that getting rid of the step function would be nice though.